Asian markets rise as focus turns to release of Fed minutes

22-Feb-2018 Intellasia | AFP | 6:00 AM Print This Post

Hong Kong led Asian markets higher Wednesday as traders brushed off a retreat on Wall Street, with attention turning to the release later in the day of minutes from the Federal Reserve’s most recent policy meeting.

Trading floors have calmed down since the wild volatility that greeted the start of February, which was caused by concerns about the impact of higher US interest rates and Treasury bond yields.

While New York’s three main indexes ended in negative territory on Tuesday, Asian dealers were in upbeat mood, helping the dollar recover from recent losses against the yen and hold its own against the euro and pound.

Hong Kong surged 1.5 percent in the afternoon, boosted by energy firms after a recent run-up in oil prices, and further chipping away at the more than nine percent losses during a torrid week earlier in February.

Tokyo’s Nikkei ended 0.2 percent higher.

Sydney gained 0.1 percent, Singapore put on 1.1 percent and Seoul was up 0.6 percent. Wellington climbed 1.3 percent and Taipei returned from a week-long Lunar New Year break to jump 2.8 percent.

Shanghai remained closed for the holidays.

The Fed minutes will be closely pored over for clues about the views of policy board members as US inflation edges up, wages improve and Donald Trump’s tax cuts come into play.

– Confidence in equities -

Stephen Innes, head of Asia-Pacific trading at OANDA, said: “US equity markets fell overnight on the back of higher US Treasury yields which are providing investors with more income than dividends on the S&P 500 Index.”

However, “while the prospect of higher interest rates will keep investors on edge, it’s not like we’re returning to double-digit levels.”

He added that even a rise in key US 10-year yields to 3.25 percent is “unlikely to kill the equity market rally as the benefits from fiscal stimulus should continue to feed through the markets. Investors are banking on much higher returns from equities than bonds again in 2018.”

On oil markets both main contracts edged down on Wednesday after a recent series of gains as the dollar edges higher, while analysts say the output cap led by OPEC and Russia is helping to mop up the global glut that hammered prices in previous years.

Dealers are awaiting the release of stockpiles data from industry group American Petroleum Institute (API) later in the day.

“Should API release report on a fourth-week build-up in crude oil inventories, we can expect for a halt in the build-up of prices,” warned Avtar Sandhu of Phillip Futures.

– Key figures around 0650 GMT -

TokyoNikkei 225: UP 0.2 percent at 21,970.81 (close)

Hong KongHang Seng: UP 1.5 percent at 31,337.48

ShanghaiComposite: Closed for public holiday

euro/dollar: DOWN at $1.2334 from $1.2336 at 2200 GMT

Pound/dollar: DOWN at $1.3988 from $1.3995

Dollar/yen: UP at 107.73 yen from 107.32 yen

OilWest Texas Intermediate: DOWN 59 cents at $61.20 per barrel

OilBrent North Sea: DOWN 47 cents at $64.78 per barrel

New YorkDOW: DOWN 1.0 percent at 24,964.75 (close)

LondonFTSE 100: FLAT at 7,246.77 (close)–finance.html


Category: FinanceAsia

Print This Post

Comments are closed.